Karachi, November 26, 2021 (PPI-OT): Gharibwal Cement – Corporate Briefing Takeaways

Gharibwal Cement Limited (GWLC) held its corporate briefing session to discuss the outlook of the company and the sector. To recall, GWLC posted a profit of Rs1,551mn (EPS Rs3.88) during FY21 as against a profit of Rs131mn (EPS Rs0.33) during the same period last year.

Retention price for FY21 stood at Rs 6,815/ton while retention for the first quarter of current year clocked in at Rs 8,182/ton. Current local retention price of the company is around Rs9,200/ton. The company cites Gharibwal Cement’s prime location as the reason for better retention prices historically.

Management believes that cement dispatch growth for FY22 will be around 3-4% YoY.

GWLC has a captive power generation plant of 38.5MW and a waste heat recovery plant of 20MW. Due to high electricity generation cost through LNG, GWLC currently is only focusing on WHR and WAPDA for power generation.

GWLC primarily uses imported coal (98% of coal mix) unlike its peers who also make use of some Local and Afghan coal to offset higher imported coal cost.

Average cost of coal inventory is around US$ 133/ton (C and F Karachi) excluding inland freight and PIBTL handling charges. The company has inventory reserve till the end of Jan-2022.

The company has signed a contract with M/S FLSmidth for supply of equipment/machinery for Pyro process for the 10,000 tpd clinker line. The plant is expected to come online within 2 years after the initiation of civil work. During FY21, GWLC capacity utilization remained at ~84% against average industry capacity utilization of ~82%. This expansion will take the total capacity of the company to ~5mn tons/annum.